We’ve all seen the commercials. It starts with the inquisitive “I’m thinking of a number”. It’s the clean cut young man sitting on a stool promoting how important your credit score is and then advertising that his company, FreeCreditReport.com, will show you your credit scores for free. He’s absolutely right and he’s absolutely wrong.
Your credit report and the information contained in it are arguably the most significant factor used in financing. Pretty much everything else can be overcome with some other factor, but a bad credit profile or low credit scores can typically only be overcome with more cash or more collateral. If you can’t verify your income then your credit profile will still enable you to get 100% financing on a flip or a rental property, and if you can’t verify your income or assets then your credit profile will still enable you to get a $100,000 line of credit with the right bank. Do you know anyone who has crappy credit and still gets loans or financing with no money in the deal? No! But I bet you know people who haven’t filed their tax returns in years, maybe even you, who still get all the money they want? It’s all about the credit profile. And when I say credit profile I mean credit scores and other factors like the seasoning of their mortgages, ratio of outstanding debt to available debt, and any derogatory reporting that has occurred in the recent past.
So he’s right. Your credit score is important. But ”the number he’s thinking about” is the $9.95 monthly charge that his company charges to “monitor your credit”. Once you agree to their credit report monitoring system, CreditCheck®, then they will in turn, graciously, give you your credit report for free. Thanks, but no thanks. There are several reports from consumers having a lot of difficulty canceling their “free” credit report charge of $9.95 per month and there are several alleged class action lawsuits in the works.
What this charlatan also forgets to tell you in his commercial is that the only thing you get “free” is a single (Experian) credit report, not all three of the major bureaus (e.g. Experian, Equifax, and Transunion). Oh yeah! If you want all three from this website then all you have to do is pay for it. AND, ordering there credit report is considered an inquiry which in turn may lower your credit score. Last but not least, when you order your “free” credit report from this company they sell your personal information to “affiliates” who pay for your information so that they can market their products and services to you. This is Big Brother at its finest. They know from your credit report that if your auto loan is more than 3 years old and you live in the southern United States that there’s an 84% chance that you’ll be buying a car in the next 12 months. You might suspect that auto dealerships in your zip code would pay a pretty penny to know this. This is what is often referred to as Trigger Leads by industry insiders. You do something that “triggers” a company to start marketing to you. All this for a “free” credit report. If you are concerned about companies selling, stealing, or using your personal information to market to you then go to OptOutPrescreen.com. This is the official website that prevents credit reporting companies, including the three major credit bureaus, from selling your personal information. Please note that this is not the same mechanism as opting-out of the generic telemarketing calls you receive at dinner. Through OptOutPrescreen.com you can opt-out of unwanted telemarketing and solicitations from companies who purchase your credit report information to “prescreen” you before they contact you. On this site you can opt-out for 5 years or even permanently.
Let’s get back to free credit reports. The Fair and Accurate Credit Transactions Act (the FACT Act a.k.a. FACTA) which is a revision of the Fair Credit Reporting Act (FCRA) provides you with the ability to get a REAL free copy of your credit report once every 12 months from the three major credit bureaus. Go to AnnualCreditReport.com to request your credit report from all three bureaus from one source. Unlike the other website, this website doesn’t require a credit card number to request your report. This is the official site used by all three bureaus and your information will not be sold or shared with any other party. This website also provides a way for reporting a fraud alert or identity theft with the three major bureaus.
“Identity theft can ruin your life” says industry advocate Jamilah Lohay. If it sounds too good to be true then it probably is. You CAN get a free copy of your credit report, but don’t risk your identity or your personal information to work with a company that can’t be honest with you from the very beginning.
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Posted by: PARK DEE | July 09, 2008 at 08:40 AM